House Ethics Committee Details Accusations Against 4 Lawmakers

WASHINGTON — The House Committee on Ethics on Thursday released four reports of separate ethical violations by four congressmen, detailing what researchers suggested was a host of inappropriate financial behavior.

The allegations against three Republicans and one Democrat focus on stock trading and the misuse of campaign funds, according to the Office of Congressional Ethics, which has been investigating the cases.

Representative Mike Kelly, the Republican from Pennsylvania, is under scrutiny over stock purchases by his wife that the investigators say were influenced by his actions as a member of Congress. New Jersey Democrat New Jersey Representative Tom Malinowski faces allegations that he failed to properly disclose hundreds of thousands of dollars worth of stock trading. Representative Alex X. Mooney, Republican of West Virginia, is charged with misusing campaign funds for personal expenses, and Representative Jim Hagedorn, Republican from Minnesota, of improperly awarding contracts to companies owned by relatives of his aides.

All four cases will be further reviewed by the House Ethics Committee, a bipartisan panel of lawmakers charged with enforcing the chamber’s internal rules.

In a particularly damning report on Mr. Kelly and his wife, Victoria Kelly, investigators concluded that there was “substantial reason to believe” that she had bought shares in a steel company with a factory in her husband’s district “on the basis of confidential information” which he had “learned from his official duties”.

Kelly’s case involves a frantic effort to help the steel mill that employs 1,400 people in his district after it was acquired by Cleveland-Cliffs last year. The Cleveland-Cliffs chief executive testified publicly that unless the federal government was able to provide his company with additional trade protection, it would close that factory, as well as one in Ohio.

Researchers found that Mr. Kelly became personally involved in Cleveland-Cliffs’ efforts to lobby the White House, pressuring Commerce Department officials and Mark Meadows, then President Donald J. Trump’s chief of staff, to take additional protective measures.

On April 28, 2020, investigators wrote, the Department of Commerce informed the head of Cleveland-Cliffs that it planned to open an investigation that could benefit the company. Relieved, Cleveland-Cliff’s executives canceled planned layoffs. The news reached Mr. Kelly, researchers wrote, citing witness interviews and emails.

The next day, Ms. Kelly bought $15,000 to $50,000 worth of stock in Cleveland-Cliffs, according to the congressman’s financial disclosures. Researchers found that purchase “atypical” because she hadn’t held or bought any individual stock for nearly a year before.

When she sold the shares in January, she made a profit: While she bought the shares for $4.70, she sold them for about $18, researchers said.

Neither Mr Kelly nor his wife cooperated with the investigation, although members of his staff and Cleveland-Cliffs officials did. Mr Kelly has since maintained that neither he nor his wife committed any wrongdoing, and a lawyer for Mr Kelly called the investigation “fatally flawed”.

A spokesperson for Mr. Kelly told The Pittsburgh Post-Gazette in September 2020 that Ms. Kelly had made “a small investment to show her support for the workers and management of this 100-year-old foundation of their hometown.” He did not explain why Ms. Kelly did not make the purchase public at the time, if her intention was to show solidarity with the company.

In the report on Mr. Hagedorn, investigators found there were reasonable grounds to believe that his office had sent nearly half a million dollars in government money to contract services from companies owned or controlled by the relatives of his assistants. and that it was using private office space at a price well below market price and trying to mislead the public about this.

Investigators concluded that Mr. Hagedorn’s office spent an unusually large sum of government money on official mail to its constituents, and that much of it went to two separate printing houses owned by relatives of two of his assistants, whom Mr. Hagedorn “was considerably more ” charged. than the fair market price for such services. While the average convention bureau spent less than 1 percent of its budget on such mail, Mr. Hagedorn’s office spent nearly 20 percent.

Investigators were unable to verify whether any of the companies, owned by the brother of Mr. Hagedorn’s former chief of staff, had clients other than the congressman’s office.

Because Mr Hagedorn did not cooperate with the investigation, investigators wrote, they were unable to definitively determine whether he was aware of the practices. But they said they had found evidence that he “knew or should have known” about the irregularities in his post-surgery.

Mr. Hagedorn hired outside counsel to investigate the matter last year and came to many of the same conclusions as the investigators from the Office of Congressional Ethics. However, that internal investigation revealed that he was unaware that the contracts benefited the relatives of his assistants.

In their investigation of Mr Mooney, investigators accused him of using campaign funds for what they believed were most likely personal ends. The report found that there were substantial reasons to believe that Mr. Mooney used campaign contributions during frequent visits to fast-food restaurants such as Chick-fil-A, Panera Bread, Taco Bell and a variety of pizza vendors near his home when there were was not a clear campaign spending target.

Mr Mooney also used campaign dollars twice to pay for West Virginia travel he called “site visits,” but investigators said these were “primarily personal in nature.” He used $2,445 in campaign money at the Canaan Valley Resort and spent $302 on a private guided fishing trip at the Smoke Hole resort, researchers said.

“While Rep. Mooney’s cooperation greatly facilitated this investigation, and he sought to remedy violations as they became apparent to him and his counsel during this investigation, the nature and general pattern of the violations raised concerns,” the report said.

Malinowski’s stock trading investigation revealed that he had not submitted required reports for transactions in 2019 and 2020, and he admitted that he had failed to do so in an interview with investigators. The report is likely to cast a cloud over Malinowski as he faces a tough reelection race next year.

In the interview, Mr. Malinowski blamed “carelessness on my part” for the lack of disclosure and said he regretted it and took full responsibility for it.

“This is not a justification or an excuse,” he said.

“I have an overwhelmingly busy job, and this was one of the things I knew I had to do,” he added. “But I didn’t put enough pressure on myself to do it every 45 days, and that was just careless.”

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